- (1.) These appeals relate to what are called transhippers and would stand covered in favour of the Customs authorities by the judgment of a bench of two learned Judges of this court, in Chowgule and Co. (P) Lid. v. Union of India but for the argument advanced on behalf of the owners of the transhippers that the judgment requires consideration.
(2.) The division bench said: "14.The further question is whether the vessels which have been converted into transhippers to be used in Indian territorial waters for topping up bulk carriers, can be said to be vessels for home consumption merely on that account, even though when they entered Indian territorial waters they came under their own power as ocean-going vessels and notwithstanding that they are still capable of being used as ocean-going vessels and are in fact so used during the off-season when it is not practicable to do topping-up operations and, for that matter, even during the fair season when they have necessarily to go into the open sea to go alongside the bulk carriers in open anchorages. In both the cases before us there can be no doubt that the vessels are not only capable of being used but are used as cargo ships to carry cargo from one Indian port to another or sometimes to foreign ports, necessarily going out on the high seas. They are structurally and technically competent to go on the high seas and they have been certified to be so competent by appropriate maritime authorities. Instead of remaining idle and getting rusty, during off-season, that is when because of inclement monsoon weather topping-up operations cannot be done in Mormugao harbour, the vessels do go out into the open sea sometimes from one Indian port to another and at other times to foreign ports. Of course, even in the course of topping-up operations during the fair season, it is necessary for the transhippers to go into the open sea to reach the bulk carriers. But, in our view, these operations do not make these vessels ocean-going vessels when their primary purpose and the purpose for which they were permitted to be purchased and brought to Indian waters, the primary purpose for which they were licensed and the primary purpose for which they are used is to conduct topping-up operations in Indian territorial waters and not to serve as ocean-going vessels. " (emphasis supplied)
(3.) Learned counsel for the owners submitted that the term "ocean-going vessel" or "sea-going vessel" was a term of art whose meaning was clear and well known. The court had recognised the fact that the transhippers were ocean-going vessels in that sense, but had declined to give them the benefit of the notification that exempted ocean-going vessels from customs duty on the basis that their dominant purpose was not for ocean-going. Learned counsel submitted that the meaning of the term, "ocean-going" being clear, it was not open to the court to go into the use to which the transhippers were put. In this behalf, learned counsel relied upon the judgments of two benches of three learned Judges of this court, in Dunlop India Ltd. v. Union of India and Indian Aluminium Cables Ltd. v. Union of India. Learned counsel also drew attention to the fact that the judgment took note that even during their day-to-day operations the transhippers went out into the open sea and that during the monsoon they sailed to other ports, either in India or abroad, so that they were put to ocean-going use.;